Foreclosure Sales Drop in 2010, but Market Still Lags

RealtyTrac just released its Year-End and Q4 2010 U.S. Foreclosure Sales Report™, and there was actually some good news…foreclosures represented a smaller percentage of sales (26%) in 2010 than in 2009 (29%).  However, the number was still higher than in 2008 (23%).  But the overall market also experienced a large drop (22%) in units sold – 3.2 million in 2010, compared to 4.1 million in 2009.

The impact is not just the number of foreclosures, but the average discount compared to regular sales.  Bank-owned properties represented a discount of 36%, short sales sold for a discount of 15%, and all properties in foreclosure sold for an average discount of 28%.

This would seem to encourage banks to approve short sales for 2 reasons…the first reason being that the discount should be less than if the bank forecloses and re-sells at a later date.  The second reason is that as long as there are so many properties in some stage of foreclosure, prices will be pulled down across the market and the market will continue to decline.  Therefore, approving a short sale and closing now would make more sense than the long foreclosure process that will force the bank to re-sell the property in a more declined market in the future.

I could continue to write about these statistics, but why not hear it straight from RealtyTrac Senior VP Rich Sharga:

This entry was posted in Foreclosure News, Short Sale Info for Realtors, Short Sale Info for Sellers. Bookmark the permalink. Both comments and trackbacks are currently closed.